By Peter Mahler
Over the last six to 12 months, churches across the United States have been noticing significant increases in their insurance premiums. Inevitably, leaders start to shop around for a more affordable policy — only to find that rising prices are everywhere. So, it’s a trend — not a specific company’s individual practices.
As a major insurer for houses of worship and other mission-driven organizations, Church Mutual monitors emerging underwriting trends so its customers can stay informed. The following is a summary of some of the developments we’re seeing for 2025.
Catastrophe underwriting and losses exceeding modeling
Insurance underwriters rely in part on catastrophe modeling to determine the amount of premium to charge for expected losses. Unfortunately, there have been an unusual number of weather-related disasters recently that have resulted in more claims than predicted — which then causes the insurance companies to readjust their models.
As we approach 2025, underwriters take the “new normal” into consideration when determining premiums and deciding in what geographic areas might have a chance at profitability. That affects individual churches when they see their premiums rise and wonder what caused the increase.
Churches can’t control the weather and its effect on insurance costs, but you can work with your insurer to make certain your building is well-protected as possible. That includes preparing for windstorms by adding roof tie-downs, storm shutters and a wind-rated garage door. Keep any items that are stored outdoors secure, so they do not become airborne and injure people or damage property. Hire a professional to inspect your roof regularly and make sure it can handle high winds as well as keep drains and spouts clear.
Churches need to budget more for insurance
It’s not just weather-related events that are affecting insurance premiums — building costs are part of the trend, too. Construction costs are rising, which means property values are increasing. When your church’s property value goes up, that means you will need higher limits to cover any potential loss.
Auto prices are also increasing, a result of inflation as well as higher repair costs for both gasoline and electric vehicles. Deductibles for comprehensive and collision are trending higher as well. Churches that own vehicles will pay more as a result to keep those vehicles sufficiently insured.
As you prepare your budget for 2025, it’s important you factor in these changes in insurance price. This might mean cutting the budget in other areas of your ministry. But consider including this information in your communications to your members, too. They have likely seen the insurance increases for their own homes and vehicles, so they can understand the additional costs you are facing and may be willing to increase their giving to cover the shortfall.
Insurance is generally a necessity in your church’s budget. While it might be tempting to under-insure your facility in hopes you won’t experience any major disasters, it is not recommended. If a fire or hurricane occurs and you don’t have enough insurance to properly replace it, that could be catastrophic for your congregation — much more so than needing to pay higher insurance premiums.
Many church buildings are aging
Time is cruel and harsh to buildings — especially when they weather years of high winds, hail, snow, ice, and even just normal wear and tear. While older churches can be charming and beautiful, they are also susceptible to major problems and may be particularly expensive to repair or replace. This has a big impact on insurance underwriting.
Houses of worship are facing an aging infrastructure, which is a significant challenge to insurability. Even if your building is only a few decades old, it likely needs a number of updates or common repairs — and you will have to decide whether those repairs are worth the cost.
In many cases, the answer is yes. To start, you might need to upgrade certain vital aspects of your facility to keep your insurance policy such as electrical or plumbing. You also want to prepare your building in case of severe weather, which could have a devastating effect on your bottom line if it causes major damage to your infrastructure. Make sure roof surfaces are clear and clean, and that windows, doors and other openings are properly maintained and secured.
In other cases — if your building is very old and in need of significant repairs — your congregation might have to decide whether it’s time to start over with a new building. It’s possible a new building could save you money in the long run, because it would have the latest upgrades, be more energy efficient and might cost less to insure.
Church operations are moving online
One of the biggest impacts of the COVID-19 pandemic was people saw how convenient it could be to experience events from the comfort of their home. Many — if not most — churches continued to offer an online option for services even after they were fully reopened.
Online church (and meetings, youth group and Sunday school offerings) can be convenient and an opportunity to spread the word. But they also open your congregation to a significant amount of risk associated with cybersecurity — which in turn can affect insurability and premiums. Churches should emphasize increased efforts to protect their network and members’ personal and financial data.
Some of the most important steps include:
- Bring a security vendor on board. Many companies offer data protection technologies, including McAfee and Forcepoint. Do your homework and find a vendor that will work for your individual needs. If you are overwhelmed by all the choices, ask your security auditor for assistance. Your vendor should offer credit card and bank account security, donor fraud protections, multifactor authentication, and IP security.
- Limit which staff members and volunteers can access confidential data. Even though you may have thoroughly vetted all staff members before hiring them, it’s still a good idea to restrict donor information. The fewer people who can access sensitive data, the better.
- Maintain network security. Do not open your WiFi network to the public. Require guests to your church to ask for permission before using your network. Do not broadcast your network name. Set your network to lock out accounts after multiple unsuccessful login attempts and use firewalls and encryption to restrict access to data.
- Keep a clean machine. Make sure all software on machines that are connected to the internet is fully updated. If you aren’t using a piece of software, delete it immediately.
Increased insurance premiums are not on anyone’s Christmas wish list. But it helps to understand why your rates might be going up — and what you can do about it.
Peter Mahler is VP – Religious Markets Underwriting at Church Mutual Insurance Company, S.I.
